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Macro Data: US Retail Sales Have Been Slumping Before The Snow

Yesterday, US data showed retail sales falling 0.4% month-over-month in January, a figure that was weaker than expected, though the miss was largely blamed on poor weather (which makes sense to me).

However, as this interesting chart shows, when we look at retail sales/services year-over-year, the trend has been rather poor. January's 3.1% y/y change is the weakest since March 2013 and generally retail activity has been falling since peaking around June 2011. Now 3% growth is still ok, but if sales continue to fall further, then we are looking at conditions that in the last 20 years have been associated with recessions.

GBP/USD: Will Break-Out From 1.6660 Mean A Run at 1.70?

I looked at the long-term picture of the GBP/USD earlier this week, and today saw the pair break through important resistance at 1.6660.

The break-out is an important sign that the bulls remain firmly in control of this pair, after the slide the pair experienced in late January. You can look at the previous article for long-term targets, while the conventional way to look at where the pair may go in the short-medium term might be to measure the height of the recent range and project that from the break at 1.6660. The recent range went from 1.6250 to 1.6660, around 400 pips, so a 400 pip from 1.6660 would target the 1.7060 area.

Great Graphic: An Annotated Historical CAPE Chart of S&P500

There has been lots of talk about the value of US equities. That according to long-run averages US equities are pricey. One of the measures used is the CAPE (cyclically adjusted P/E ratio).

Here is a great graphic that not only shows the CAPE since 1881, but add lots of context by annotating key historical events on top of it. Now this chart is a little bit dated, and so let me update below with the most recent data in there.

(See the most up-to-date CAPE readings here -